Question

stanley wishes to claim the child tax credit by claiming his nephew ryan as a qyalifying child drpendent. stanley brings in ryans middle school records showing that ryans address is stanleys address. assuming all the eligibility requirement are met, what additional questions should the tax professional adk to meet the due dilligence requirements for this credit

Answer 1

Basic/Normal Qualifications for availing Child Tax Credit in one's IT return will have to meet the following criteria:

The child must be related to the taxpayer in any of several ways (son, daughter,grand child,niece,nephew etc.)

must be living in the taxpayer’s home more than half the year--for the year in which credit is claimed

and must not be providing more than half of his or her own support

So, some more additional questions to meet due diligence will be

Do the child's parents live with you? Why are the parents not claiming the dependence To qualify, the child cannot have provided more than half of his or her own financial support during the tax year. 4. Dependent test You must claim the child as a dependent on your tax return. Bear in mind that in order for you to claim a child as a dependent, he or she must: 1) be your child (or adoptive or foster child), sibling, niece, nephew or grandchild; 2) be under age 19, or under age 24 and a fulltime student for at least five months of the year; or be permanently disabled, regardless of age; 3) have lived with you for more than half the year; and 4) have provided no more than half his or her own support for the year. 5. citizen test The child must be a U.S. citizen, a U.S. national or a U.S. resident alien. (For tax purposes, the term "U.S. national" refers to individuals who were born in American Samoa or in the Commonwealth of the Northern Mariana Islands.)     6. Residence test The child must have lived with you for more than half of the tax year for which you claim the credit. There are important exceptions, however: A child who was born (or died) during the tax year is considered to have lived with you for the entire year.Temporary absences by you or the child for special circumstances, such as school, vacation, business, medical care, military services or detention in a juvenile facility, are counted as time the child lived with you. (There are also some exceptions to the residency test for children of divorced or separated parents. For details, see the instructions for Form 1040, lines 51 and 6c, or Form 1040A, lines 33 and 6c.) 7. Family test The child tax credit is reduced if your modified adjusted gross income (MAGI) is above certain amounts, which are determined by your tax-filing status. In 2017, the phase out threshold is $55,000 for married couples filing separately; $75,000 for single, head of household, and qualifying widow or widower filers; and $110,000 for married couples filing jointly. For each $1,000 of income above the threshold, your available child tax credit is reduced by $50. Once all this requirements are met than further this question shall arise Tax Professional should ask further this question: Whether your credit exceeds the tax liability ? If Yes,then tax will become 0 and remaining unused credit is lost.However unused balance can be taken as Additional Child Tax Credit( ACTC) by Filing Form IRS 8812 . NOTE: dont give a direct thumbs down if you are not satisfied with the given answer , comment your doubts in the command box , give a like if you are satisfied with the answer.